Highlights of the new SIAC Rules 2016

Introduction

Established in 1991, the Singapore International Arbitration Centre (SIAC) is now recognised as one of the world's leading international arbitration centres. The Financial Times recently reported that Singapore is challenging established centres for arbitration such as London, Paris and Stockholm. Case filings at SIAC have increased by more than 300% in the past 15 years.

In conjunction with celebrations of its Silver Jubliee, SIAC announced the release of the sixth edition of its arbitration rules (SIAC Rules 2016) on 27 May at the SIAC Congress 2016. The SIAC Rules 2016 will come into effect on 1 August 2016. A summary of the key changes is set out below:

Expedited Procedure (Rule 5)

The Expedited Procedure under Rule 5 is a potentially useful procedure for parties as it significantly shortens the time frame of an arbitration and reduces costs. To allow for this mechanism to be used in more cases, the monetary threshold (i.e. the maximum amount in dispute) under Rule 5 has been increased from SGD 5 million to SGD 6 million under SIAC Rules 2016.

In addition, the Tribunal now has the discretion to decide whether an Expedited Procedure case is to be decided on the basis of documentary evidence only (i.e. without a hearing). Previously, the dispensation of a hearing required parties' consent.

Rule 5.3 also makes it clear that if there is any conflict between the terms of the arbitration agreement and the Expedited Procedure, the provisions in the latter will apply.

Multiple Contracts and Consolidation (Rule 6 and Rule 8)

The new rules on Multiple Contracts (Rule 6) and Consolidation (Rule 8) provide a streamlined process for the administration of disputes arising out of or in connection with multiple contracts.

Under Rule 6, the Claimant may (a) file a Notice of Arbitration for each contract and concurrently submit an application for consolidation pursuant to Rule 8.1; or (b) file a single Notice of Arbitration for all contracts where it shall be deemed to have commenced multiple arbitrations, and the Notice of Arbitration will be considered an application to consolidate all those arbitrations pursuant to Rule 8.1.

Under Rule 8, any party may also apply for consolidation after arbitration proceedings have commenced provided the relevant criteria are met. Prior to the constitution of the Tribunal, the application for consolidation is made to the Registrar provided any of the following criteria is satisfied in respect of the arbitrations to be consolidated:

all parties have agreed to the consolidation;

all the claims in the arbitrations are made under the same arbitration agreement; or

the arbitration agreements are compatible, and (i) the disputes arise out of the same legal relationship(s); (ii) the disputes arise out of contracts consisting of a principal contract and its ancillary contract(s); or (iii) the disputes arise out of the same transaction or series of transactions.

(see Rule 8.1)

If the Tribunal has been constituted, the application is made to the Tribunal. The applicable criteria are slightly different and take into account whether the same Tribunal has been constituted in each of the arbitrations or whether no Tribunal has been constituted in the other arbitration(s) (see Rule 8.7).

Joinder of Additional Parties (Rule 7)

Under Rule 7, both parties and non-parties may apply to be joined in an arbitration pending under SIAC Rules 2016 as a claimant or respondent. The applicable criteria are (a) the additional party to be joined is prima facie bound by the arbitration agreement; or (b) all parties (including the additional party to be joined) have consented to the joinder. The application for joinder may be made before or after the constitution of the Tribunal (see Rules 7.1 and 7.8).

Early Dismissal of Claims and Defences (Rule 29)

SIAC is the first major international arbitration centre to introduce a procedure for early dismissal of claims and defences. Under Rule 29, parties may apply for an early dismissal of claims or defences on grounds that the claim or defence is manifestly without legal merit or the claim or defence is manifestly outside the jurisdiction of the Tribunal. In order to safeguard against unmeritorious applications, the Tribunal has the discretion to decide whether the application for early dismissal should be allowed to proceed. If the application is allowed to proceed, the Tribunal will make its decision on the application (with reasons which may be in summary form) within 60 days of the date of filing of the application (unless in exceptional circumstances the Registrar extends time).

This is a welcome addition to the SIAC Rules 2016. It allows parties an efficient process to address at an early stage any claims or defences that are manifestly unmeritorious or outside the jurisdiction of the Tribunal, potentially resulting in significant savings of time and costs.

Emergency Arbitrator proceedings have been enhanced under the SIAC Rules 2016. Rule 30, read together with Schedule 1, provides that an Emergency Arbitrator will be appointed within one day (instead of one business day) of receipt by the Registrar of the application for interim relief, and payment of the required fees and deposits. In addition, the Emergency Arbitrator has a time limit of fourteen days from the date of his appointment (unless in exceptional circumstances the Registrar extends time) to issue the order of interim relief. Fees of the Emergency Arbitrator are now fixed at $25,000. This fixed fee provides more certainty for parties compared to earlier versions of the rules which provided for a range of fees depending on the amount in dispute.

Seat of Arbitration (Rule 21)

Singapore is no longer the default seat of arbitration under SIAC Rules 2016. Rule 21 provides that parties may agree on the seat of arbitration, failing which, the determination of the seat is left to the Tribunal. As the seat of the arbitration has a bearing on the procedural laws governing the arbitration, parties whose arbitration clauses do not specify a seat should take note of this new rule.

Remedy against a non-paying party (Rule 27)

In order to progress the arbitration in circumstances where the respondent refuses and/or fails to pay its share of the costs, the claimant may end up paying the respondent's share of costs (in addition to its own share). Rule 27(g) seeks to address this situation by expressly empowering the Tribunal to issue an order or award for the reimbursement of unpaid deposits towards the costs of arbitration, where one party has paid the other party's share of deposits on their behalf.

Challenges to Arbitrators (Rule 15, Rule 16 and Schedule of Fees)

The Court of Arbitration of SIAC will now provide reasoned decisions on challenges brought against arbitrators. This will increase the transparency in how the Court of Arbitration has considered and addressed points raised by parties in relation to the independence or impartiality of arbitrators. The administrative fees for arbitrator challenges have also been fixed at SGD 8000 for overseas parties and SGD 8560 for Singapore parties (inclusive of 7% Goods and Services Tax).

Concluding comments

The SIAC has been proactive in adapting and revising its rules and procedures to address practical issues that arise in international arbitration today. The changes brought by the new SIAC Rules 2016 should be welcomed by users of international arbitration because they clearly focus on making arbitration more efficient and costs effective. The new rules are also innovative and they provide for remedies not available in other arbitration institutions, for instance the procedure for early dismissal of claims and defences.

Key contacts

Jamie Harrison

Head of Singapore Office, International Arbitration
Partner, Hong Kong (non-resident)